Monday, July 9, 2012

eBay is NOT an auction site

The idea of eBay as an auction website is nothing more than clever e-commerce marketing.
As a professional auctioneer, eBay is a regular part of my lexicon. Many
people I talk to commonly associate online auctions with eBay. eBay has
done well marketing their service, because while they do have a bidding
process, they are not an auction site. eBay does not conduct online
auctions; items sold on eBay are not sold at auction. They promote the
idea of an auction without actually having one.
The definition of an auction is: “[a] public sale in which property or
items of merchandise are sold to the highest bidder.” Source:
http://www.thefreedictionary.com/auction
eBay does not sell anything to the highest bidder. Instead, items are
sold on eBay to the winning bidder at a pre-set end time. There is an
entire cottage industry that builds software to deploy last second bids
on eBay. This behavior is known as “snipping.” By entering a bid with
only a few seconds left, other users do not have enough time to enter a
counter-bid before time expires and the sale is made.
By having a pre-set ending time instead of selling to the highest
bidder, eBay effectively circumvents auction laws created to protect
buyers and sellers. They also get around licensing requirements in many
states. Many items on eBay are sold for less than their actual value
because time expires before bidders have a chance to bid again after
being outbid. In the past on eBay I have been a buyer willing to pay
more for an item but didn’t get my bid placed before the sale closed,
and I have also been a seller who received calls from upset bidders
pleading me to sell them the item for more than the final price listed
on eBay.
eBay doesn’t even claim to be an auction. The eBay user agreement
states that they are a venue to conduct “auction-style formats.” Their
user statement goes on to state: “you acknowledge that we are not a
traditional auctioneer. Instead, our sites are venues to allow anyone to
offer, sell, and buy just about anything, at anytime, from anywhere, in
a variety of pricing formats and locations, such as stores, fixed price
formats and auction-style formats.” Source:
http://pages.eBay.com/help/policies/user-agreement.html
At a real auction, online or live, there is a binding contract between
buyer and seller. eBay expressly states that bids DO NOT create a formal
contract: “For certain categories, particularly Motor vehicles and Real
Estate, a bid or offer initiates a non-binding transaction representing
a buyer’s serious expression of interest in buying the seller’s item
and does not create a formal contract between the buyer and the seller.”
Source: http://pages.eBay.com/help/policies/user-agreement.html
Not a binding transaction?! This defeats the purpose of a website that
is supposed to sell items. When all is said and done, eBay is just a
marketing site charging a fee for an ad. If the buyer can walk away from
a bid without repercussions, no transaction has occurred, and no one is
any better off.
eBay is a site for consumer to consumer transactions. It is a place
to sell tchotchkes, collectables, trinkets and other C-to-C items. It is
an online market place just like Amazon.com, or an online version of a
flea market. The design of eBay gives regular people the opportunity to
sell online. As such, it is not a professional environment. It is not a
place to sell complete estates or to conduct business to business
transactions. Their terms and conditions allow too much freedom to back
out of transactions once they are complete.
eBay should not be a tool used regularly by licensed auctioneers who
make a living using the auction method of selling. Professional
auctioneers conduct real online auctions on sites like Proxibid or from
their own websites. The rules are different on an authentic online
auction website and the terms and conditions allow real business to be
conducted. Buyers and sellers are protected and both benefit from a
controlled environment.
True online auctions have extended bidding. With extended bidding
there is no set closing time. Instead each lot remains open until there
are no additional bids for a set amount of time. This method nets the
seller more money and insures the buyer willing to pay the most has the
opportunity to win the item.
Now that you know the difference between an online auction and eBay,
consider avoiding the term “eBay style auction” when describing your
online auction. To me, “eBay style” means a clever e-commerce marketing
idea where items are sold for less than they are worth to the lucky
bidder who got the last second bid. That is not an online auction, nor
is it something I want to promote.